Oct 29, 2026 earnings call — Subsea order growth and future outlook
Company increased full-year Subsea revenue guidance to a range of $9.6 to $9.8 billion.
Revenue $2.9B (est $2.8B) · EPS $1.05 (est $0.88)
Key quotes
"This outlook is reflected in our subsea opportunities list, which has increased for the ninth consecutive quarter and highlights an opportunity set that has grown 25% over the last 2 years to $32 billion when using the midpoint of project values."
"And most recently, we celebrated the manufacture and delivery of the 200th subsea tree for ExxonMobil in Guyana. With our Subsea 2.0 platform, enabling greater standardization across multiple projects."
"We are increasing Subsea revenue to a range of $9.6 to $9.8 billion. We are increasing free cash flow guidance to a range of $1.45 to $1.5 billion."
Analyst Q&A 9
Timing of $14.5 billion projects
Q (David Anderson · Barclays): He asked if the current macro affects timing of the $14.5 billion of projects over the next five quarters and whether the company has line of sight. He also asked if larger greenfield projects are more complex and if that raises content and margins.
A: Management said the macro is fluid but there is no direct correlation with the timing. Timing depends on what falls in the calendar year 2026 versus 2027 and '2 to 3 very large projects' could conclude by year end or tip into the new year. On complexity, greenfield mainly differs by geology, their Subsea 2.0 configure-to-order applies across greenfield and brownfield, and brownfield can reach first oil fastest.
"In terms of its impact on our outlook or the timing of the outlook, there is no direct correlation, David." — Douglas J. Pferdehirt (CEO·CHAIR)
Drivers of 50% incremental margin
Q (Mark Wilson · Jefferies): He asked for more detail on the comment that subsea incremental margins approach 50% in 2027 and whether that comes from Subsea 2.0 awards, iEPCI, or other factors. He also asked about capacity and utilization at manufacturing sites.
A: Alf said the 50% incremental margin comment referred to 2027 and is driven by backlog quality, higher throughput, and industrialization. Margin expansion comes from mix (more Subsea 2.0 and iEPCI), services growth, and throughput improvements; they are capital-light and focus on solving constraints rather than big CapEx. He said Subsea 2.0 orders can flow through plants at about 2.5x a normal 1.0 tree and there are no current capability concerns.
"And yes, that is through many different aspects, including increased mix of Subsea 2.0, iEPCI, as well as making sure that our service business grows at least in line with our overall business." — Alf T. Melin
Faster cycle times and $10 billion inbound
Q (Arun Jayaram · JPMorgan Securities): He asked what is driving faster cycle times (example: Suriname) and for an update on industrializing installation. He also asked whether the $10 billion inbound target for calendar 2026 still stands and if any slippage would be timing or losses.
A: Douglas said Suriname deliveries were ahead because they were on the ground, built relationships early, and used the Subsea 2.0 standard, which lets them deliver ahead of schedule and reduce cycle time. On inbound orders he said the short answer is yes: 2 to 3 awards are in final stages and are more likely than not to land in the calendar year to deliver approximately $10 billion of inbound for 2026, but he was cautious about timing.
"They are still more likely than not going to land in the calendar year delivering the approximately $10 billion of inbound for 2026." — Douglas J. Pferdehirt (CEO·CHAIR)
Regional opportunity outlook
Q (Alexa Bruno · Goldman Sachs): She asked for regional color for early 2027—where opportunities are by region such as Africa and the North Sea. She also asked how commercial terms or pricing of new projects entering backlog compare with work being executed and implications for margins.
A: Douglas said activity is broad: South America (Brazil, Suriname, Guyana) remains critical, Africa (West, East, North) is robust, the Norwegian Continental Shelf remains active, and Asia (Indonesia) and Australia also show activity. On commercial terms he said the new inbound work being added to backlog is accretive to backlog margins because they improve project economics and share in the created economic value.
"No, it is an important question, Caitlin, and I will I am happy to share with you that the new work or the inbound that we are putting in the backlog is accretive to the backlog margins." — Douglas J. Pferdehirt (CEO·CHAIR)
Structural vs cyclical demand
Q (Scott Gruber · Citi): He asked whether the step up in orders into 2027 is what they expected at the start of the year or has improved because of the macro, and whether this is structural or cyclical. He also asked if iEPCI 2.0 CERT is in the 2027 margin benefit or still to come.
A: Douglas said this is a structural change, not primarily cyclical, driven by iEPCI/Subsea 2.0 improving project and delivered economics and restoring customer confidence; he noted customers are awarding directly and booking multiple projects. On iEPCI 2.0 he said they did not count its contribution in the 50% incremental margin for 2027, so that technology represents additional future upside in margins and cycle time reduction.
"This is a structural change that we have been talking about for years." — Douglas J. Pferdehirt (CEO·CHAIR)
Q4 seasonality and portfolio buying
Q (Josh Silverstein · UBS): He asked if margins should fall in Q4 beyond normal seasonality or if there are other margin headwinds. He also asked where customers are adopting portfolio-based offshore development and how that changes visibility, pricing, and market share.
A: Alf said Q4 effects are normal seasonality: lower activity in venues like the North Sea and vessel maintenance/drydocking that reduce utilization but align with lower activity. Douglas said many clients are considering portfolio approaches where they have asset visibility; this appears in mature basins and in emerging basins, and Subsea 2.0 standardization plus consistent performance enables cross-geography portfolio buying and greater customer confidence.
"I think every 1 of them is considering it just you know, I can say that because of the discussions that we are having with them." — Douglas J. Pferdehirt (CEO·CHAIR)
Order timing and services growth
Q (Marc Bianchi · TD Cowen): He asked why year-to-date orders trended below expectations and if any specific factors were affecting order conversion this year. He also asked whether services will still grow in line with overall subsea revenue in 2027.
A: Douglas said it was mainly a timing issue: 2026 had many smaller awards which are harder to predict, leading to spread-out conversions and many unannounced awards. Alf said it is reasonable to assume services will continue to grow in line with the overall segment as previously discussed.
"So, really, it is it is just been a timing issue." — Douglas J. Pferdehirt (CEO·CHAIR)
Services contribution and margins
Q (Victoria McCulloch · RBC): She asked whether the size and margin profile of the services contribution in the results differs from what they expected 12 months ago.
A: Douglas said it is not much different than expected and that services operate under an OEM model with good visibility; services are more book-and-turn but predictable with standard maintenance programs. He noted a strong pickup in well intervention in Q3 and described services as a very solid, sustainable, high-margin business they will continue to invest in and grow.
"it is a very good, very solid, very sustainable, and a strong margin contribution business for us." — Douglas J. Pferdehirt (CEO·CHAIR)
Why activity extends beyond decade
Q (Derek Podhaizer · Piper Sandler): He asked why management now says strength extends beyond the decade—whether that is due to continued momentum or a change in visibility—and asked for updates on partnerships with startups that move markets from onshore to subsea.
A: Douglas said the portfolio approach—customers buying multiple projects in series—gives confidence that activity extends beyond the end of the decade, and customers are also reconsidering capital allocation and host nations are pursuing reserves. On startups he said this is already happening: independent operators are directly awarding work because of iEPCI/Subsea 2.0, and their client mix has grown from about 9–12 clients to 30–40 clients per year.
"You know, another way of saying that is beyond the end of the decade." — Douglas J. Pferdehirt (CEO·CHAIR)